Moonpig predicts return to sales growth as greeting card retailer posts record Mother’s Day sales
- Moonpig has struggled to increase sales since the easing of Covid restrictions
- Trade has been worsened by rising inflation which is dampening consumer spending
- Moonpig Group shares were the highest riser in the FTSE 350 on Thursday morning
Moonpig anticipates a rebound in revenue growth over the next fiscal year despite a tougher economic environment.
The online greeting card retailer has struggled to boost sales since the easing of Covid-related lockdown restrictions encouraged more consumers to start shopping for their cards and gifts again in stores.
Trade was also hit by rising inflation, falling consumer spending and strikes by Royal Mail postal staff, which impacted last-minute card orders, particularly in the UK. last fall.
Struggles: Moonpig has struggled to boost sales since the easing of lockdown restrictions encouraged more consumers to start buying their cards and gifts again in stores
Reflecting these headwinds, the London-based company lowered its full-year revenue outlook for the 12 months to April from around £30m to £320m last December.
But he told investors on Thursday he was sticking to those guidance, along with his guidance for adjusted underlying earnings each year, after record weekly sales ahead of Mother’s Day a fortnight ago.
The company, founded by former Dragons’ Den star Nick Jenkins, expects a return to revenue growth in fiscal 2024, supported by strong demand in the second half of the period.
Managing Director Nickyl Raithatha said: “Moonpig Group’s market-leading positions, strong customer loyalty, high profitability and strong cash generation enable us to navigate all stages of the economic cycle.
“We are excited to return to revenue growth in the year ahead, supported by continued investment in our technology, marketing and operational capabilities.
“As the undisputed leader in online greeting cards, Moonpig Group is well positioned to benefit from the market’s long-term structural transition to online.”
Shares of Moonpig jumped 16.1% to 131.9p in early trading after the news, making it the biggest riser on the FTSE 350 index.
However, their value has fallen by around 62% since their introduction in February 2021, when there was a surge in the number of London-listed tech companies.
The stock also remains one of the most shorted among London-listed companies, with five major fund groups, including Marshall Wace and BlackRock, all taking significant bets against Moonpig.
Last September, the retailer said it would prioritize the sale of greeting cards because of its “demonstrable track record of resilience” in good and bad economic conditions.
Russ Mould, Chief Investment Officer at AJ Bell, said: “Since joining the stock market, Moonpig has been at pains to explain his strategy of generating income from a broader base of items. and to smooth its income throughout the year.
“Gifts have been key to its growth, offering people the opportunity to send chocolates, flowers or even facilitate a skydive. This part of its growth plan didn’t quite work out as planned.
“Ultimately, Moonpig still has a lot of work to do to prove that it can respond to the hype surrounding the stock at the time of its IPO. Namely to prove that there is a structural shift towards buying goods online.
